In this edition, we ask what does Brexit mean for food prices and how does this impact your business?
As the pound continues to weaken, suppliers who are trading in the EU are having to secure future currency rates. This leads to uncertainty and speculation as to what might happen when the UK formally leaves the European Union. Fluctuations in foreign currency exchange means that food prices are more susceptible to change and your money won’t go as far as it used to.
We are seeing specific product categories affected by these fluctuations and uncertainty. In particular, frozen vegetables, canned tomatoes and tinned tuna. These are staples for any kitchen and the rising cost of these items will affect everyone.
Below is a breakdown of the shift in food prices by category and product. As you will see, the European-wide shortage of butter means that this product will see the largest price hike. You can read our guide to the European butter crisis and advice on how you can reduce your costs in the kitchen for more information on this.
The Full Range have now secured fixed pricing on core grocery items until end of March 2018, including bacon, canned tomatoes & tinned tuna, protecting you from any fluctuations in food prices caused by market volatility in the lead up to Brexit. Get in touch to find out more about how The Full Range can further help your business cut costs and increase margins today.
Fresh Meat, Beef, Lamb & Pork
The past year has seen some of the most significant price increases for meat in the past 25 years. UK cattle prices are now around 12% higher than in August 2016 and are continuing to rise. Supermarket alignment to UK post Brexit has put further strain on availability.
Poultry prices have not been quite as affected as the price of beef, lamb and pork. However, the price of poultry has increased because of the devaluation in the pound.
We are currently working hard to ensure this years’ turkey prices are aligned to those negotiated for our customers last year.
Pork, Bacon & Sausages
In April 2017, EU production was down 9% year on year. Producers are attempting to rebuild stock levels after high slaughter rates in 2016 reduced the size of breeding herds.
- Concerns over supply in H2 of 2017 have led to EU pig prices continuing to rise on a weekly basis (+13% in July 17 vs. July 16)
- UK pig prices remain high (+25% in July 17 vs. July 16)
- Increased demand in retail for UK pork has maintained these high prices over the summer
- The implication of China’s new agricultural policy which moves pig herds away from urban areas and waterways has resulted in significant disruption to production. This disruption increases China’s dependency on shipments from the EU
Salmon pricing is stabilising in the run up to Christmas, however The Full Range have managed to reduce price by over £1 in the past 3 months with a further reduction agreed for October.
- Cod & Haddock: there is a lack of availability of larger fish at the moment impacting products like cod loins and supremes. Haddock availability will further improve come mid-October and ease any ongoing supply issues. The Full Range have agreed a price fix on haddock for October and a reduction for cod
- Coldwater Prawns: The Full Range have agreed a fixed price on the highest volume prawn line. Our North Atlantic 2.5kg bag will be the best price available on the market.
- Warm Water Prawns: Prices are still rising due to ongoing currency fluctuations and raw material shortages. It is important to note that we could see the price rocket on warmwater prawns come the end of the year if the EU bans imports from India
- Seabass & Bream: Bream price is being impacted by currency fluctuations
- Scallops: Prices continue to rise due to poor weather and a lack of availability
Fruit & Veg
- All tomatoes have increased in price due to seasonal change from Dutch to Spanish/ Polish/Moroccan
- The UK lettuce season is finishing so we will be moving over to France where the new season begins shortly
- Jerusalem artichokes have come into season and are in good supply
- Brussel sprouts are now in season
- Pumpkins will soon be available for Halloween with price points the same as last year
- The season for UK berries is coming to an end. Strawberry punnet size has been reduced to 300 grams by the grower in an attempt to elongate the season. Blackberries and blueberries will be finishing in the next few weeks. We are hopeful that raspberries will run to the end of October
- Brazilian grapes will be starting very soon and the price will remain high from now until after Christmas
- Brazilian melons are also starting very soon so the price will be high at the start of the season
- Spanish onions are expensive at the moment and if the price continues to rise we would suggest substituting them with dutch onions
- Aubergines and courgettes are in short supply at the moment with many suppliers paying close to £15 per box. We hope this price spike is short-lived but we may need to revisit if it continues
- Roosters/Ware potatoes are all down in price along with parsnips. The Full Range agreed a special price on chips for last month which will continue
As part of an ongoing series of blog posts, The Full Range team will examine each product and category in more detail to provide you with clarity and analysis about how this might affect your business. Subscribe to our newsletter for exclusive updates today.